Are Traditional Utilities Becoming Obsolete?

The next time you’re driving around town, observe the community and see how many homes and businesses have installed solar panels. You may be surprised at how common these devices have become in recent years. In fact, some believe that solar panels are becoming so common that they may eventually put utilities out of business. Can this really happen?

A recent drop in the cost and installation of solar panels has drawn more interest in distributed solar. Jim Rogers, chairman and CEO of Duke Energy, explained in an interview with Bloomberg, “If the cost of solar panels keeps coming down, installation costs come down, and if they combine solar with battery technology and a power management system, then we have someone just using us for backup.”

While some companies are worrying how this will affect their bottom line, other companies are embracing the change. NRG Energy, an operator of traditional power plants, is among the first to expand into administering mini-generation structures that provide power to a single building, completely bypassing the utilities. NRG Energy CEO David Crane explains how consumers are beginning to realize that they may not actually need to rely on the power industry, “The individual homeowner should be able to tie a machine to their natural gas line and tie that with solar on the roof, and suddenly they can say to the transmission-distribution company, ‘Disconnect that line.’”

NRG Energy constructs its solar projects for commercial and industrial buildings, but they are now considering the opportunity of offering leases for solar panel roof structures to businesses as well as homeowners.

These solar leases give customers the opportunity to install rooftop panels at no upfront cost. The customer signs a contract that ensures they pay a fixed monthly payment. Companies that offer this type of agreement normally provide its customers with a lower payment for their energy than through their utility.

Eventually, Crane also wants to apply a similar concept to the network of underground pipes that distribute gas to the majority of the homes in the U.S. If this idea materializes, customers will be able to produce electricity from fuel cells and microturbines.

The spike in distributed generation, or on-site generation, will have a greater affect on the electric utilities than on the consumers. “They can’t cut costs, so they will try to distribute costs over fewer and fewer customers,” stated Crane. He then explained how this method will end up raising energy costs for customers, who will then become more interested in distributed generation, resulting in a major snowball effect.

What do you think? If this system becomes affordable in your area, would you embrace it? Leave your thoughts in the comments section below.

Sarah Battaglia has been one of the in-house Copywriters and the Social Media Manager for NRG Business since 2011. Born and raised in Buffalo, NY, Sarah holds a Bachelors degree in Business Management and Marketing from the State University of New York at Buffalo. Out of the office, she has a passion for baking delectable desserts, cooking for her family, and riding her bike. Sarah can be ...

A solar revolution is the misnomer in my opinion. yes i can easily see a day when home storage and solar cells provide a majority of the energy for homes. but a wide spread gridless society may be a way after that. and why not. we know that the economies of scale still slide towards larger installations, wind, solar, wave, tidal, solar thermal, biomass. all of these do better at a bigger scale than that of a single household or building. even logistically it becomes excessively complex. a grid can deliver power from central facilities to home storage systems when it is available or when the supply exceeds demand. we wanto to build renewable energy generation to meet our energy needs but the intermittency of the sources means that it is almost a statistical impossibility to have supply meet demand for anything else but an instant.

a combination of storage and distributed grid and domestic renewable energy generation will give the best of both worlds batteries to absorb the overs and unders and provide "inertia" to match the constantly changing normal customer demand. it will provide short circuit protection and failure recovery but not without very complex communication and coordination controls. having worked for a market operator and been part of a national response team i have seen the complexities of running our existing systems, going to more a complex distributed supply and storage arrangement is not impossible just challenging. I also designed connection requirements that mean that the state I come from, south australia, has one of the highest renewable energy penetrations per capita world wide.

The poles and wires businesses will provide a crucial service to market and consumers for some time yet. the challenge will be paying for them. the more people who reduce their load with PV and provides challenge for the network service providers to manage power flows in the opposite direction to that which they were originally designed. this costs. people putting in storage may reduce peak demand but it wont take away existing infrastruture and if the same people want to stay connected just incase their batteries fail or the son and his mates decide to light up the neighbourhood with sparks by shorting the storage out they will still want a backup. yip you could do it with a small ICE or something like that but until the wires are pulled out of the street why not just get the backup from the existing grid. the poles and wires businesses are monopolies and they are, in australia, regulated and only allowed regulated rates of return on their assets. the less people that use the existing assets means that those that cant move cos they cant afford to, or dont own their homes, or dont have the space for the facilities will pay more and more to preserve the returns of the network providers. you cant effectively do a death to the wires by a thousand cuts. as people go the price per customer remaining goes up. then to protect the people who stay governments will need to change to rules. I see a time before the networks are redundant that every land owner will pay a facilities charge like we do for water supply or sewerage. it will be like the council rates or land tax.

the challenge in my mind then is integrating all of the existing facilities and new opportunites to provide a reliable, cost effective solution that is socially equitable and does not undermine the fabric of the energy industry or society such that it becomes an unstable environment in which people and organisations can invest.

Sarah, distributed, off-the-grid power generation sounds good in theory. The reality is that without the local power grid the building owner (residential or commercial) will need some form of backup power. Micro-turbines are yet to be commercially developed and fuel cells are incredibly expensive. Today, those who are truly off-the-grid use a combination of solar PV, ICE generators and batteries. The useful life of commercially available batteries is only a year or two, so what do you think the primary source of power is? Most often petroleum ICE electric generators.

As the cost of residential solar comes down Utility companies will be charging increased costs to those who use their power as backup during the night and on cloudy days. Remember, having access to any utility service (water, sewer, satellite communication, etc.) has a connection cost whether used or not. Only if a resident is totally disconnected and independent should they not be liable for connection costs and the right to backup power on-demand. Everyone needs to pay their fair share for access to any service or good. Otherwise the rest of the customer base would be forced to pay for those services (as you state).

In the coming years as private solar PV expands you will likely hear about increased demand for power grid connection fees, not dissimilar to the recent call for EV owner’s to pay their fair share of roads maintenance (increased registration costs vs. avoided petroleum fuel taxes).

John, speaking of paying our fair share, we need that philosophy when it comes to unaccounted for cost of our energy supply such as fossil emissions and their public health and climate disruption costs. Whether it's coal,gas, oil,nuclear or renewables the present and FUTURE costs need to be fairly accounted for.

"The useful life of commercially available batteries is only a year or two"

That's really not the case, given normal use; it also depends on it's use and of course the battery type as well as the environment it is put in.

The life of a recharchable battery is actually more dependant on how it's being charged and discharged. Especially the charging is determining in its useful life. But leaving a battery in an uncharged state (which we often do) is actually breaking down its structure and renders it unusable quicker.

Pieter, my personal and contact’s experience is that when you use a solar PV-battery pack for off-the-grid residents’ (in Mexico for example), the battery is used most every evening. Unfortunately, this usage can partially cycle the battery pack capacity most every day. Can you reference any existing or commercially available battery pack systems that do not lose capacity and overall useful life when operated in this less ideal manner (compared to fully charging and discharging with less frequency)? My experience is that Pb-acid and NiCd’s packs, and smaller Lithium-ion batteries all go bad within a year or two (especially in the heated environments of exterior building installations).

John, I have an 2003 Honda civic hybrid. It has a 230 Volt battery pack used for acceleration and hills. I believe it is a Nickel metal hydride. Now 10 years old after 110,000 miles and some brutally cold and hot upper midwest climate it still takes a full charge and seems to perform as the original. Now most of the time I can keep it more than 2/3 charged but sometimes below half and even close to total discharge. This would be difficult to simulate for PV backup unless in sunny climate and the battery pack was of sufficient size for the load ,but possible.

Hello John, the issues regarding to battery life has much to do with its use. For example, if you have deep.cycle lead-acid batteries, which are commonly used in PV systems, the useful life of these batteries are much determined on how far you discharge them during a cycle.

The rule is mostly that one shouldn't let the battery discahrge too much before recharging it. The chemical substances and material inside the battery degrade faster when discharging the battery more profoundly.

So let's say that a small PV system typically discharges its battery until around 60%, and then a recharge comes when the sun appears next morning. This will let the battery 'live' for much longer time than when the same battery is discharged until 40% is left (and then recharge).

Other battery types may have better or worse results, but it is a fact that the rate of (continuous) deep or profound discharge affects life battery a lot (in a negative way).

I think most of the PV systems that use batteries are not well dimensioned and that causes the short battery useful life. There are chargers for sale the can rejuvenate old batteries that do not seem to function anymore. All that is needed actually is restoring the chemistry of the battery. Todays (commercial) chargers actually break down the battery bit by bit. Go to http://teslachargers.com/ this will open your eyes.

Anyways, today we have very good means of connecting our PV systems to the grid using net metering which eliminates the need for batteries, with the added benefit of lower system costs especially on the long run.

Only time will tell of course but to me prove is already showing up that renewables together with sustainable energy storage will push fossil fuels to the background because they offer so much more advantages in comparison with fossil fuels and even biofuels.

We have had 100 years or more of extensive fossil fuels and economies are having a hard time now. Something has to change radically and the first and best solution is to replace our fossil fuel addiction with sustainable options. Renewables have a much shorter time but are expanding quickly.

Renewables will crush prices, deliver clean energy, offer much more jobs, and will do so even more when technology breakthroughs will get to market. Big oil is fighting back hard but it will be unavoidable. I just hope it will happen in time.

"Renewables will crush prices, deliver clean energy, offer much more jobs, and will do so even more when technology breakthroughs will get to market. Big oil is fighting back hard but it will be unavoidable. I just hope it will happen in time"

Industrial wind received more subsidies than coal, natural gas and nuclear power combined in the US. Even the wind industry admits wind energy is far more expensive than other, conventional forms of electrical generation. Jobs? What jobs? Europe's experience tells us we will LOSE jobs, not gain jobs. What does "big oil" have to do with electrical generation? We don't produce more than 1% of our electricity from oil and renewables require (REQUIRE) back-up from stable forms of generation like natural gas and nuclear energy. Coal plants are inefficient and pollute at a much higher rate when they are ramped up quickly to prevent the grid from crashing due to the erratic nature of wind power - as has been shown in Colorado. I've asked for the environmental studies that tell us how much industrial wind we can site before ecosystems collapse due to stressors on populations of necessary species. There are none. 0. Studies are based on the pipe-dream of unlimited transmission and unlimited public funding for both the transmission and the turbines. The USFWS cites a 47% loss of raptor abundance where we site industrial wind and that is an immediate impact. That reflects a loss of habitat. Loss of habitat is the leading cause of species extinction. I fail to see how collapsing ecosystems will lead the planet to a better future. If we are going to effect change, positive and real change, this will not happen with decisions based on perceptions and politics. We need to use science and reality.

" I've asked for the environmental studies that tell us how much industrial wind we can site before ecosystems collapse due to stressors on populations of necessary species. There are none. 0. "

Mary, below are links and a quote to studies by The Nature Conservancy ,DOE and World Wildlife Fund.

"The Nature Conservancy in New York supports the responsible, thoughtful development of alternative energy sources like wind and solar, and believes that renewable sources of energy are an essential element of a national strategy to increase energy security while reducing greenhouse gas emissions."

http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0017566To your point:" unlimited transmission and unlimited public funding for both the transmission and the turbines"

I think your main concern is about the New Era Wind Farm in Goodhue county MN. This may or may not be an appropriate site for wind. If your're a member of the Goodhue County Electric coop, you get the majority of your power from the GRE's Coal Creek coal plant about 50 miles north of Bismark ND. If the wind farm were to be built with CCGT backup there would be far less transmission and habitat destroying CO2 emissions.

Thanks, WindSmith. I've seen those reports, but they are not actual studies. I attended the USGS meeting in December and was stunned to find that there is nothing that tell us how much elasticity there is in the environment to facilitate appropriate wind energy siting. There are no scientific studies: I asked. There are none at the state level in Minnesota either: I asked. They do not exist. USFWS has one small study out of Buffalo Ridge. That's it. USGS is working on the first one with BOEM. The Black Swamp Bird Observatory is working on one with USGS and a couple of University's but they are under assault from industrial wind companies, who don't care that the area provides stopover habitat for birds traveling the world's longest migratory pathway. The study is far from done - but with the PTC set to expire.....developers can't wait for that important environmental data.

As for "The Nature Conservancy in New York supports the responsible, thoughtful development of alternative energy sources......" it sounds really good, but that's not what is happening out in the field - where no one is watching, monitoring, or making sure there is compliance with site permits. The wind industry already has a full-build out scenario and has asked for an 8 state HCP without a single study that would tell them whether or not ecosystem have the elasticity to support such a plan. They are using a 2006/2007 interconnectivity report that examined financial considerations and models related to transmission, but there is no environmental consideration whatsoever. Contact Joe Sullivan of Wind on the Wires and ask him for these environmental studies. I have retained the numerous emails I received while on my quest, including his, which says, "No such study exists." Ellen Anderson, "No such study exists." Bill Grant, "There are no studies." There are perception based publications but there is NO scientific data and we continue to ignore what little we know: 47% loss of raptor abundance and per an IA biologist who says he burned out trying to protect wildlife from wind: a 42% loss of other birds where wind turbines are sited. That's a major biological and environmental impact, but the effects will not be realized for about 10 years, or so the past tells us. Implementation of "environmental policy" based on perceptions but no actual environmental data is folly. We're siting based on the inter-connectivity report and politics in Minnesota. The environment be damned! We're going to save the planet even if it means we have to kill everything on it. We're so flippin' arrogant.

Additionally, since the US Army out of Ft. Meade conducted extensive studies on Low Frequency Noise as a Directional Weapons System and reported the same symptoms as those suffered by citizens living near improperly sited turbines, I'm wondering where the noise studies that describe impacts from the peculiar LFN from industrial wind on wildlife resources are? Again, there are none. The pressure differential causes bats to hemorrhage to death. Bats are mammals. What sort of effect does hits have on other mammals? Oops....we forgot to look at that! Something causes 47% of the raptors and other birds to leave....What? There have been no studies done to determine impacts, but only reports done to forward the ambitions of another industry (oil/gas/coal/nuclear are also INDUSTRY) by disproving what the military has determined is an effective weapons system. This is disturbing to me. If the goal is sustainability and the planet is in a crisis we should not be working to "bring certainty to investors and developers", as the AWEA argues. We should be working to bring certainty to eco-systems, which depend upon balance. WE depend upon that same balance.

Goodhue County and the New Era wind installation are not my main concern; the problem is much larger. I believe that tiny project gained notoriety, not because of citizens or eagles, but because the wind industry is afraid that if they are called on the carpet for their treachery and deceit it would set an industry standard and many companies would be at risk. The developer, Peter Mastic, has no site control, no PPA, no road agreements and cannot lay transmission lines or build a substation. Over 46% of the land is unavailable to him. What project? He appears to be the only one who doesn't know that he should pack up his dog and pony show and move on. Available transmission was how he selected his site - again with no environmental concerns.

EcoHarmony, also in Minnesota; pushing for Permits despite knowing they jeopardize the largest bat hibernacula in the entire state. Bats are a keystone species: this is extremely dangerous for the ecosystem. I am concerned that the implementation of perceived environmentally responsible programs and policy's, without any shred of scientific data to back them up, will collapse ecosystems and create a far worse scenario across this country and around the globe. I don't know how we can possibly hope to clean up the environment with such a corrupt and polluted process.

As for CO2 emissions destroying habitat:from plants turn carbon into oxygen so I'm not sure what you're referring to when you say "there would be far less transmission and habitat destroying CO2 emissions." Also, emissions are down and not just by a little,and yet the planet surface continues to warm. If carbon was the culprit we would see our surface warming preceded by atmospheric warming but that is not the case. I'd hate to spend billions of dollars and 20 years funding a perception based solution only to find out that the focus of our attention was never the problem at all. Where are the scientific papers talking about the effects of habitat fragmentation UP. Wind industry proponents often say, "cats and buildings kill more birds than wind turbines." First of all, these things are as tall as the same buildings they talk of. Secondly, how many cats have killed golden eagles? How many wind turbines have killed golden eagles? Third, there is no more left of a 4 gram bird hit by a 78 ton blade swinging 30 mph than there is of a bug that hits the windscreen of your car when you're traveling 65 mph down a highway. And.....post-construction mortality is not reported. The wind industry will only agree to do so if the info can be Trade Secret so as not to erode public support.

Goodhue County gets the majority of it's power from a nuclear power plant located about 15 miles away: Prairie Island.

1.When it comes to environmental damage, I believe/know that CO2 emissions are the 900 pound gorilla in the room.

2. Nuclear is an option but only if we don't cheapen up the safety systems, have objective, non corruptible oversight of design,building and operation,much better waste plan and environmental review of the rivers,lake and ocean water they use for cooling. The NRC recommended filters for the Monticello nuclear plant and possibly Prairie Island also but was rejected as too expensive by Excel.

You are also, no doubt, aware of the EQB reports that show emissions have been reduced "dramatically" over the last three decades. If we're trending down with emissions, according to the EQB, and global warming stopped in the late 90's, what, precisely, are we fighting? Are we able to affect a positive change or are we just arrogant?

We're not so far off, wind smith. I agree whole heartedly with point 2., but think you are naive if you believe this is not the same trend in industrial wind. Corruption is the name of the game with reports based to pander to perceptions, not reality. How can we possibly hope to achieve a global sustainability when the bar is set so low?

hello. traditional utilities became obsolete more than thirty years ago. the energy sector has managed misinformation with expertise. they protect their jobs. the transition to home generated energy is only for nonconformist whackos. it has been increasingly technically feasible every day for years.
here in Alabama, we are perhaps the 3rd best state for photo-voltaic energy, but we supply the southeast with coal. nobody can use sun energy in Alabama. many years ago, Texas A&M pioneered large capacitor storage banks, and no one knows of what i write. other states are better for wind.
existing oil pipelines can be used to transport hydrogen, and hydrogen can be produced for free from salt water, using wind power generators- but it's the politics. the politics of free energy, free transportation, and the loss of jobs from a sector not willing to embrace replacement jobs.
the profits. a few wealthy people in control of your energy are not going to agree to provide anyone but themselves the advantages of free energy. they are too narrow minded to envision a new revenue stream for themselves.

The artificial situation created by Solar Power bought and redistributed to customers by utilities, leaves me unconvinced. In spite of appearances, utilities which are often forced to purchaes power from unsteady and un-dispatchable souirces create the ilusion of dispatchability and reliability for renewable sources.

If the Utilities and their centralized power distribution were to disappear, the customer would have to somehow produce steady power 24/7 for himself. In the case of Solar power, this would mean finding a way to keep power going at Night or on dim wintery days.

Fuel cells are a different story however. The only problem for fuel cell users is if something were to disript the supply of fuel (natural gas).

It behoves us as serious debaters to reveal the upside and downsides of each energy production method. Solar power is not staedy and it is not available all the time without storage. Those are just the unvarnished hard Truth.

Our electric cooperative in the upper midwest transmits 500 mwh/year to 25,600 businesses,farms and residences. They purchase wholesale power from GRE a producer with coal,gas and wind generation .Our co-op just raised the monthly service fee from $11 to $19. Wholesale power is 69% of operating expenses so 31% is maintaining the 4000 miles of power line and some administrative expenses. Residential rates are $.11/kwh with no off peak service. Co-op income was $48,000,000. 31% of that is what the total cost of connection is and could be interpreted as the fixed service fee. 31% of $48,000,000 = $14,880,000 divided by 25,600 customers would = $581/year. Say a low user uses 300kwh/month = 3600kwh/year. So the connection charge per kwh = $.161/kwh + $.11 = $.27/kwh.This cost is right around what PV + storage would cost. Yes,it could happen.

Mark Glaess of the MREA reported that the rural electrical cooperatives in Minnesota LOST 70 million dollars as a direct result of the mandate forcing rural electrical cooperatives to purchase wind energy that could not be used or sold. Approximately 70% of the wind energy they had to buy fit the "loss" scenario. How did GRE fair? What was your breakdown?

Thank you, Rick! I am out of state at the moment and will not be home until May, but I will pass this information along to friends who share my concerns about the direction we have run with renewables. I find the lack of re-evaluation based on scientific protocols extremely distressing and aggravating. Our state wants to pass a 40% renewable mandate with NO data saying ecosystems have the necessary elasticity to support this fantasy.